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Pint percentages


Pint percentages

 

Average price of a pint – The information on prices was taken from The Good Pub Guide 2016 (1). The average price of a pint in the UK is £3.46. Regional national prices range from the cheapest £3.30 to the most expensive £3.92 (2). In another article on the same story it stated “There are savings also to be made in the pubs in Yorkshire, where the average price of a cold, frothy lager is just £3.15” (3). With this in mind we chose a 4% standard lager for pricing and duty.

Prices for Enterprise Inns were taken from the Enterprise 2016 Publican Price List (4). We used a 4% standard lager (Carling) for prices.

Prices for the Wholesaler were taken from an online wholesale supplier (5). We used the same product as for the tied tenant, Carling.

The amount that the tenant earns from an average priced pint is the remainder of an average priced pint once the supplier and HMRC (VAT and duty) have been paid.

Neither tenant or supplier costs have been included in the graphic, however tenants’ costs have been included in benchmarking surveys (12). It should be remembered though that, based on the EI price list, EI would have 55.49% of the average priced pint to pay costs whilst the tenant would have a paltry 15.61%.

The VAT content of the average price of £3.46 (6).

Duty was worked out as 18.37 x 4 which equals 73.48p per litre, 41.73664 per pint rounded up to 42p (7).

Percentages of the average price were worked out using a percentage calculator (8).

Average rent dictated by RICS Pub Benchmarking Survey (9).

Average throughput dictated by a starting point of 210 barrels as stated in Trade and Industry Select Committee Report of 2004 “... a tied tenant with an average throughput of 210 barrels per annum, with ...” (10). Beer sales have been in continual decline for a number of years, the BBPA shows a decline in on-trade sales of 8372 barrels, a 38.92% reduction between 2004 and 2015(11). The same reduction was made to the throughput to produce an average throughput of 128.7 barrels. It would take 79p of an average priced pint to pay the average leased rent.

 

Costs for a tied tenant and a FoT tenant are similar, with rent for both sectors also being similar (12). Comparisons are made as a percentage of turnover for majority tied v majority non-tied.

If a tied tenant were to try an compete in the open market place, by charging a national average, they would only secure a 34% gp (13), we believe that this would untenable, to achieve a more realistic 45% gp a tenant would have to charge a whopping £4.18 a pint, this is clearly in excess of all averages provided. We are at a loss as to understand how this could possibly be viewed as making markets work well for consumers, businesses and the economy (14).

 

It is clear that an average tied tenant, being charged the Publican’s price list, would have some considerable difficulty in competing within the market place on an average price for a pint of standard lager. A tied tenant on an average rent would have to charge £3.76 just to cover the cost of product, rent, VAT and duty and the pubco would take a whopping 72.02% of the price of this pint!

 

 

 

1.      http://www.thegoodpubguide.co.uk/

2.      http://www.telegraph.co.uk/food-and-drink/features/cheapest-and-most-expensive-pint-in-the-uk/

3.      http://www.standard.co.uk/lifestyle/foodanddrink/fancy-a-pint-this-map-shows-just-how-much-the-price-of-beer-costs-across-the-uk-and-londoners-won-t-a3093916.html

4.      http://www.enterpriseinns.com/documents/publican-price-list.pdf

5.      http://jf-kegs.co.uk/kegs/keged-lagers

6.      http://www.vatcalculator.co.uk/     https://www.gov.uk/vat-businesses/inclusive-exclusive-prices

7.       https://www.gov.uk/tax-on-shopping/alcohol-tobacco

8.      http://www.percentage-off-calculator.com/

9.      http://www.morningadvertiser.co.uk/Operators/Other-operators/RICS-Average-new-lease-rent-up-3-year-on-year 

10.   http://www.publications.parliament.uk/pa/cm200405/cmselect/cmtrdind/128/12810.htm

11.   http://www.beerandpub.com/statistics Beer barometer (please download excel for figures)

12.   http://almr.redbeetle.co.uk/wp-content/uploads/Benchmarking-9-Briefing-Slides-for-website.pdf Pg 13 for Costs tied v non tied pg 14 for Rent tied v non tied

13.   http://www.innhousesolutions.co.uk/Content/gross-profit-calculator

14.   https://www.gov.uk/government/organisations/competition-and-markets-authority/about


Thursday 3rd March 2016

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